Spending Grew for Those with Employer-Sponsored Health Plans

September 26, 2012 (PLANSPONSOR.com) – U.S. health care spending grew faster than expected among those with employer-sponsored insurance (ESI) in 2011, according to a report.

The Health Care Cost Institute’s (HCCI’s) “The Health Care Cost and Utilization Report: 2011” shows health care spending grew 4.6%, reaching $4,547 per person. The HCCI said this growth was significantly greater than the rate observed in 2010 and exceeded expectations for 2011. Spending growth slowed from 5.8% in 2009 to 3.8% in 2010 for those with ESI. Many experts anticipated a modest growth rate for 2011.

The report also indicates consumers spent more of their own dollars on health care in 2011, with out-of-pocket spending growing to $735 per person—a $32 increase from 2010—and costs covered by insurance grew at almost the same rate.

Price increases also influenced spending growth for 2011, including for hospital stays, outpatient care, procedures and prescriptions. However, HCCI found that prescription spending slowed, growing at just 1% from 2010 to 2011, or to $733 per capita. This slow growth is attributed to net changes in prices and use of brand name prescriptions versus generics, the report said.

Key findings include:

The regional spending gap is widening. HCCI analyzed spending in the four major U.S. Census regions. The Northeast had the highest per capita spending ($4,659) while the West had the lowest ($4,358). The gap in spending between the two regions grew from $232 in 2010 to $301 in 2011.

Spending on children’s health care is growing fastest. Per capita spending on children (ages 0 to 18) grew more rapidly than spending on other age groups, similar to 2010. In 2011, the growth rate increased 2.1 percentage points to 7.7%—more than twice the rate of the spending for those ages 19 to 44 and 55 to 64.

Cost sharing between patients and payers remains stable. Spending on health care was split between consumers and insurance companies, similar to previous years, with insurers paying for 83.3% of total expenditures and insured enrollees contributing 16.2%. Payers contributed $3,812 per person in 2011.

The use of outpatient and health care services is up. Compared with 2010, in 2011, people with ESI used more outpatient services and had more procedures performed. Visits to the emergency room increased 3.7%. However, they had fewer hospital stays and filled prescriptions.

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